Jim Armitage: More power to Justin King as he calls it right on tax-dodgers and energy bills

Jim Armitage

Jim Armitage is the City editor of The Independent and London Evening Standard group of newspapers. He has been a reporter and editor for more than 20 years and was recently shortlisted for the Press Gazette financial journalist of the year and The Society of Editors financial journalist of the year awards. He contributes news, investigative reports and comment to the Independent titles plus a daily column in the Evening Standard.

Outlook Is Justin King, the Sainsbury's chief executive, running for Prime Minister? Pretty much every word he spoke yesterday raised a cheer in the Armitage household. I know he thrives on being the PR showman. I know he's making Tesco look like his store's less successful little brother (a neat trick, given that the opposite is true) and, as he plans to open a fifth supermarket in my neighbourhood, I know he's as guilty as any chain of putting small shops out of business.

But from the moment he rattled out his attack on tax-dodging British companies on Today to his outburst in his afternoon press conference battering the energy companies' price rises, I was thinking: you'd get my vote, mate. His argument on tax is particularly gratifying for those of us who've been banging on about it ever since avoiding dues became a national boardroom sport.

He explains that, when a company relies for its profits and dividends on the labour of thousands of British workers, with British educations, kept healthy by the NHS, it has a moral duty to pay its taxes. His quote that "for many businesses, corporation tax has become optional" rings especially true.

Where I'm not quite with him is his claim that avoiding tax is the height of business short-termism because it stops customers spending in your store. I can't see the evidence for this. In a time of recession, for most shoppers, the morality score of the shop selling their washing powder and milk will always take a back seat to price.

Primark is a case in point. The deaths of mroe than a thousand sweatshop workers in Bangladesh seem to have made nary a dent in its UK sales. When it comes to taxes, where is the evidence of Vodafone or BHS losing thousands of customers after campaigns by tax avoidance protesters?

In the light of this lack of an impact on revenues or profits, chief executives and finance directors will always be tempted to cut corners on tax. Big businesses are not generally convinced by Mr King's argument of the moral question, preferring the line that they have a duty to their investors to maximise profit and minimise costs. All the while, accountancy firms, banks and their tax lawyers come up with ever more ways to make the dodges easy and legal.

As companies have become bigger and more international, opportunities for such wheezes have spread like Japanese knotweed, making it harder for Her Majesty's Revenue & Customs to keep track.

The poor old taxman should not be blamed for this: he is only applying the tools he is given. But the Government should be.

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